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Post-Brexit Britain, Europe and Policy towards Iran and the GCC states: Potential Challenges, and the Possibility of Cooperation

Britain’s unprecedented withdrawal from the EU presents a unique challenge both to
the UK and the EU in defining their policies towards the countries of the Gulf, whether
together, in friendly rivalry, or in less constructive competition. The regional dynamics
in the Middle East, especially the destabilizing behavior of Iran, the ambitions of Saudi
Arabia and the Qatar Crisis, has increased the levels of uncertainty in which European
pol ...

Abstract

Britain’s unprecedented withdrawal from the EU presents a unique challenge both to
the UK and the EU in defining their policies towards the countries of the Gulf, whether
together, in friendly rivalry, or in less constructive competition. The regional dynamics
in the Middle East, especially the destabilizing behavior of Iran, the ambitions of Saudi
Arabia and the Qatar Crisis, has increased the levels of uncertainty in which European
policies will be played out. Individual as well as collectively European states and the
EU have been seeking to play a more critical role in the Gulf. Given Britain’s historical
role played in the Gulf, it is not surprising that it has been seeking to reestablish itself
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as an influential actor, alongside and sometimes in competition with France, both
perhaps aware of the more unpredictable role of the United States and the growing
interest of China in the region. It is possible, however, that, due to the challenges the
UK is likely to face in the years following Brexit, it will lose its place in the region.
This workshop seeks to identify and explore the most urgent questions associated with
this ambiguity both in relation to Britain and other European states as well as to the
Gulf states themselves.

Description and Rationale

Objectives and scope:
In the case of the UK, though the date for its withdrawal from the EU is set for 29
March 2019, the nature of its withdrawal and its future relationship with the EU,
economically and in terms of foreign and security policies remain uncertain. Several
EU summits are likely before we know the terms of the UK-EU ‘divorce’, and the future
relationship beyond any implementation period which is meant to last less than two
years. The widely differing views on Brexit, not least within the Conservative Party,
pose a challenge to the UK, made more so by the possibility of a general election if the
May Government was defeated a growing support for a second referendum, though if
one wasto occur, whether the question posed would include the possibility of remaining
within the EU remains unknown. With such a lack of consensus at home, it makes it
particularly difficult to predict UK foreign policy beyond the platitudes of ‘Global
Britain’.
One unknown of the UK’s withdrawal is its future relationship with EU-level security
resources and institutions, such as the Common Foreign and Security Policy (CFSP)
and the Common Security and Defend Policy (CSDP) at a time of some possibly
significant developments especially of the latter with moves towards Permanent
Structured Cooperation (PESCO) and closer collaboration on defence equipment
through the European Defence Agency. If there is progress, it means that the UK will
not benefit from the advantages available to the EU27, at the same time as it loses the
voice ‘magnification’ that EU membership has brought it. Moreover, a second
unknown is the indirect consequences for the UK’s ability to pursue any grandiose
policies independent of its erstwhile EU partners if the British economy suffers
adversely from leaving the European market.
Moves within CSDP point, too, to third unknown – the extent to which the EU itself
sees and acts on the potential of better relations with the Gulf states. On the one hand,
the economic relationship between the EU and the GCC might have reached stalemate
despite some efforts by, for example, Chancellor Merkel to restart negotiations on a
free trade agreement during her visit to the Gulf in 2017. |Meanwhile German bilateral
trade has been continuously improving. Both may well impact on the UK’s ability to
sign any advantageous free trade agreements with either the GCC or individual Gulf
states. On the other hand, France has for some time been seeking to establish itself, via,
for example its base in Abu Dhabi, as a key security actor in the region.
A fourth unknown is the role of the United States in the region and the relationships
both a post-Brexit UK and the EU27 may seek to establish with it. The UK has always
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been at great pains to maintain its historical relationship with the US, which post Brexit
may be of even greater importance given President Trump’s endorsement of the Brexit
vote – symbolized in the reciprocation of official visits in January 2017 (Ms. May’s
visit to the US) and in July 2018 (President Trump’s visit to the UK). But the UK faces
a dilemma – as does the rest of Europe – in its relationship with the Trump
Administration. The President’s unpredictability, his clear dislike of multilateralism
whether expressed through NATO or the WTO create tensions in the Atlantic
relationship. The President himself may not rue the loss of the UK as a diplomatic
‘bridge’ between the US and Europe but certainly past Administrations have seen it as
useful. The British government may remain confident in the continuation of the ‘special
relationship’ especially in terms of intelligence sharing and yet US policies create
difficulties. One area of difficulty is in relations with the Gulf, and America’s strong
support for Saudi Arabia and its condemnation of the Joint Comprehensive Plan of
Action (JCPoA) with Iran.
The JCPoA epitomizes especially strongly contemporary tensions. As a member of the
EU3, the UK worked hard to develop a better relationship with Iran. On the one hand,
it was firm in supporting EU-level sanctions regime as the part of the comprehensive
strategy that, on the other hand, also included negotiations to bring Iran’s nuclear
programme under control. The success of that strategy lay in the JCPoA of 14 July
2015. When he became Foreign Secretary, Boris Johnson, remarked: ‘I hope this will
mark the start of more productive cooperation between our countries, enabling us to
discuss more directly issues such as human rights and Iran’s role in the region, as well
as ongoing implementation of the nuclear deal and the expansion of the trading
relationship between both our countries’. The decision by President Trump to pull out
of the agreement in May 2018 – despite, inter alia, Boris Johnson’s last minute efforts
to persuade the Trump administration to the contrary – left the UK government at odds
with the US and working with the EU27 in an effort, along with Russia and China, to
save the agreement. Whether this is possible remains, of course, to be seen, the socalled Special Purpose Vehicle, designed to side-step US sanctions being as yet [in
September 2018] only a proposal. Some UK interests, some British banks and British
Airways seem already to have assumed it to be unlikely.
But the US decision places the UK in a particularly delicate position not simply in its
relationship with the US but also with Saudi Arabia. The British Prime Minister,
Theresa May, during her visit to the Gulf in December 2016 may have wanted ‘to assure
you that I am clear-eyed about the threat that Iran poses to the Gulf and the wider
Middle East; and the UK is fully committed to our strategic partnership with the Gulf
and working with you to counter that threat’. But the Iran deal had considerable
economic and financial potential that has had to be weighed against the existing
significance of the relationship with Saudi Arabia, The UAE and Bahrain especially.
Considering the challenges to EU/US relations, post-Brexit policies towards Iran
remain particularly uncertain.
The GCC states are crucial partners for the UK, sharing deep-rooted relations in a
number of contexts, including diplomacy, trade, military/security cooperation, culture,
education, and relations between the royal families. Though the UK government is
ready to fully engage with the GCC, the GCC’s internal issues, such the Qatar Crisis
that started in 2017, impede full cooperation. Theresa May participated in the Gulf CoOperation Council of 2016, and discussed relations between the GCC states,
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highlighting the historical ties between the UK and the GCC, and stating her ambition
‘to build new alliances but more importantly, to go even further in working with old
friends, like our allies here in the Gulf, who have stood alongside us for centuries’. And
clearly the UK will be seeking agreements on a basis that may give it an advantage over
the EU27 though the extent that that is possible may well depend on the UK’s final
agreement with the EU.
That will also in part determine the extent to which a post-Brexit UK will retain its
attraction as both a global financial hub and an attraction for inward investment from
the Gulf. While there may be few challenges to the City of London as a financial centre
in the immediate future, there are predictions of a movement of financial services
towards other European centres. Whether the UK can remain the ‘eighth emirate’ to
use the words of Tony Blair in 2006 and echoes by Boris Johnson a decade later, may
well be of crucial importance given the levels of investment by the Gulf states, and not
just the UAE. In part, for the UK, the importance of continued investment lies in
whether it can persuade Qatar, Saudi Arabia and the UAE to invest beyond the London
property market. It is also a question of whether the ambitious visions and plans of the
Gulf states remain attractive to British capital – but not of course only British capital,
Germany and the other EU countries are also following such plans closely.
Britain and the other EU member states have inevitably hedged their bets in the crisis
over Qatar. Given the need to attract inward investment from both sides in the Gulf
dispute, most European states have been supporting the mediation attempts of others,
especially Kuwait, and certainly, visits by the Saudi Crown Prince and the Qatari Emir
to Paris, London and Berlin resulted in new commitments for investment and lucrative
sales deals.
However, the sales of arms and military equipment, while increasingly significance for
both British and French manufacturers, has also exacerbated tensions of the war in
Yemen and human rights issues. In such circumstances, the extent to which Brexit
reinforces the importance of Saudi purchases may create further embarrassment for the
British government. On the other hand, Britain’s move to increase its physical presence
in the Gulf has appealed to other sectors of the British polity in a similar way, perhaps
as France’s physical presence enhances French support for the continuation of the
concept of a Global France.
This workshop aims to consider how these different tensions and unknows may interact
for the future of relations between a post-Brexit UK, the EU and the countries of the
Gulf including Iran. By the time of the next GRM, we will know the outcome of the
Brexit negotiations and we will better be able to track moves that may change British
and EU27 relations with the Gulf states – or whether traditions and the weight of history
reinforce current patterns. Against this has to be set the changes in the Gulf, the present
disputes and the trajectories of at least economic reform. And, not necessarily in the
background, are the changing positions of the United States and China that are likely
to impact on Europe’s interests.